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State Senator Doug La Malfa

June 10, 2011
[Publisher's Note: As part of an ongoing effort to bring original, thoughtful commentary to you here at the FlashReport, I am pleased to present this column from Flash Report contributor and State Senator Doug La Malfa - Flash]

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While we see the potential effects of the loss of revenue to key programs in the coming fiscal year, there are few who admit that what we are facing now is a direct result of years of irresponsible budgeting and our state’s direct assault on private industry in the way of high taxes, fees and regulation.  The current policies have chased businesses and the jobs they provide out of the state. And, year after year it has been apparent that several key budget solutions and proposals are urgently needed, yet they have not seen the light of day. 

Many of my colleagues and I have long urged:
  • Imposing a hard spending cap limited to the increases in inflation and population growth so that spending is kept in line with revenue growth.
  • Pension reform.  Milk and billboard inspectors are not public safety and should be treated that way.  Also simple reforms such as increasing retirement age and increased employee contribution will save millions if not billions in the long run.
  • What about capping salaries for government executives to no more than the Governor’s salary?
And, little has been done to reduce fraud and verify eligibility in costly social programs such as CalWORKS, IHSS and Medi-Cal.

Yes, the taxpayers support these programs in concept, but they don’t want their money to go to those who are undeserving.  In 2009, it was reported that 78% of the CalWORKS recipients were not meeting minimum work requirements.  They weren’t working, looking for work, seeking job training, performing community service or getting an education.  What has changed?  Are we still sending these people a check?

In-Home Support Services is a program that the taxpayers believe in and support.  They appreciate the desire to help the elderly and infirm get the assistance they need to remain in their homes.  But, the taxpayers also want to know that the state is paying people who are not ex-felons.  Since there are no verification requirements, how do they know they are paying for actual hours worked to benefit those who really need the care?  Many of my colleagues and I have proposed safeguards to ensure that the almost $6 billion we spend on these In-Home Support Services are providing actual care recipients need.   In April of this year, the San Diego Grand Jury found that only 20 percent of the recipients are severely impaired and unable to care for themselves.  But, no significant verification procedures are being implemented.  Let’s add up those potential savings.  Or would we rather ignore the waste and fraud and simply raise taxes? 

In 2010, Sacramento County’s fraud tax force ferreted out 19 felony cases of IHSS fraud in a four month period totaling $315,000 in overpayments among 42,000 caregivers and clients.  The task force noted at that time that it was investigating another 145 IHSS participants suspected of bilking the system out of more than half a million dollars.  That’s only one county of 58.

In March of 2009, Attorney General Jerry Brown’s office reported that seven private medical laboratories had defrauded the Medi-Cal program of hundreds of millions of dollars by overcharging the state as much as 400% for blood, urine, and other lab tests.  How widespread is such fraud? 

And, if the taxpayers consent to raising taxes for five years, will you stop there?  The Governor’s budget projects a 27% increase in spending in the next three years.  Does anyone actually believe these taxes will be “temporary?”  Two years ago, we were told the taxes would be temporary.  Why would anyone believe that five more years will change anything? 

And, will the Democrat majority stop there? No.

Legislative Democrats already approved of legislation (which the Governor signed) to divert funds derived from a surcharge that utility users pay – that’s supposed to go to renewable energy programs.  The funds will now be used to create a “green” curriculum in public schools.  And guess what?  The ratepayers may now be expected to pay an additional surcharge to backfill what will be spent on environmental education in our public schools. 

Democrats also want to impose new taxes on soda, oil and gasoline, tobacco, even water, and they’re still pursuing a $40-plus billion single-payer health care plan.   In fact, some believe the state should simply keep the tax and fee revenue that’s supposed to go to our cities and counties to pay for the programs we require them to provide, but now many here want the state to keep those funds and give our locals authority to raise a whole new raft of local sales taxes, income taxes, vehicle licensing fees and more. 

I recommend we put a stop to the $46 to $100 billion high-speed rail boondoggle, which is clearly under-funded and will require huge, annual appropriations of ongoing taxpayer-funds just to survive. Not a single independent review has found the plan to be workable. But we haven’t.

The taxpayers shouldn’t be asked to fork over one more dime.  Not until we take drastic actions to end waste, fraud and abuse, not until we remove the regulatory hurdles that strangle businesses and currently make California the worst place in the nation to start a business, and not until we implement obvious reforms to downsize the costs of running our government.  And once we do those things, we won’t need to raise taxes.   

State Senator Doug La Malfa represents California's 4th District.

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